Leaders confront new era in corporate governance during inaugural session of directors' college.

• Position: Executive Summary

Directors of public companies, once largely shielded from public view, must now operate in a spotlight created by corporate scandals and sweeping new legislation and rule making. Board members are required by law to take on significantly more responsibility in ensuring that their companies are ethically and competently managed. The media and the public, sometimes viewing the roles of directors with what may be unrealistic expectations, have expressed concern, lack of trust, and even suspicion. Along with this exposure and responsibility have come fears of greater liability for directors.

A new era requires new understanding, new approaches, and new solutions. For this reason, PricewaterhouseCoopers joined the University of Delaware in offering the inaugural session of a two-day Directors' College. Here, directors of large public companies--facing the Sarbanes-Oxley Act of 2002, new regulations, and other reforms--joined with experienced thought leaders in corporate governance to discuss today's most pressing issues and how to prepare their boardrooms for the future. Directors took part in small, collaborative sessions with their peers and thought leaders, where they shared strategies and practices, and exchanged ideas on how to effectively discharge their responsibilities. Directors also had the opportunity to hear from keynote speakers and distinguished panels.

Some of the highlights include:

Fallout From Sarbanes-Oxley Act

* There are broad concerns over the vagueness of the Sarbanes-Oxley Act and the practical application of some of its provisions, as well as concern that excessive regulation may inhibit competitive behavior and risk taking by companies. There is further concern that the public expects boards of directors to prevent future frauds and corporate financial disasters. In response, boards must do a better job of informing the public of their activities. They also must manage the impact on time and resources of complying with the new and emerging rules, to avoid becoming distracted from their main role of helping create shareholder value.

Boards Must Take Leadership

* Corporate power has swung strongly to the board of directors, and its members must seize the day. Providing effective leadership requires that boards take control of certain areas. Boards should nominate "really good people," clear out "deadwood," review executive succession plans, rationalize executive compensation, require ethical behavior, and perform serious...